Posted by: Martin | January 30, 2012

Shipping Issues

Is this really happening?

Ok, so now that I want to ship two cars quickly to Abidjan before any import restrictions are put in place it seems Murphy’s law has stricken:

First I get this from the shipping company:

Good morning Martin,

Due to the strike action in Nigeria over the last while the vessels have in turn been delayed coming back to Europe therefore the sailing date will not be the 25.01.2012 as previously scheduled.

The next sailing will be delayed by a couple of weeks. I have not got the confirmed sailing date yet but should have it this week.

And then I see this on Bloomberg:

No Slower Steaming as Container Lines Run Like Clippers: Freight
Container ships can’t go any slower.

Shipping lines are running out of options to stop losses as sailing speeds reach their lower limit, exhausting a solution that helped restore profitability in 2010.

The global container fleet is now cruising near record-low speeds after slowing 11 percent from August when the freight rate market collapsed, according to data compiled by Bloomberg and Lloyd’s Register.

[…]

“Some of these container ships are now so slow that they’re close to the speeds of the old sailing ships. The clippers might actually have been faster.”

Slow-steaming, pioneered by A.P. Moeller-Maersk’s container unit, Maersk Line, helps carriers cut costs when times are tough. By sailing at lower speeds, ships need less fuel and can offset capacity stresses by using more vessels to make up for the longer sailing times.

[…]

Maersk Line says it may be able to bring its speeds down even further. The company cut its average speed to about 17 knots last year from 20 knots in 2008, according to Morten Engelstoft, Maersk Line’s chief operating officer. The company’s whole fleet currently sails at about 16-18 knots, he said.

“There is still some potential for slow-steaming, both for us and probably for the industry,” Engelstoft said in a Jan. 23 interview. “We are looking into the possibility of super slow- steaming. That would be 12-16 knots.”

The 19th-century clippers, the fastest ships of their time, transported tea to the U.K. and U.S. from China and India, according to the website of the U.K. Tea Council. The ships, which had three or more masts and dozens of sails, could reach a peak average speed of more than 16 knots.

Any spare room for two Toyotas?

Inevitable snags

Well, guess doing business is rarely entirely straightforward, and that the real test is how one handles the hurdles and snags that inevitably come up along the way.  In this case I have already changed shipping company to one that isn’t affected by strikes in Nigeria, so one down.

There is not too much to be done about the speed of container ships, but it only means the cars will arrive a couple of days later to Abidjan and that, hopefully, shouldn’t matter. The upside is that shipping stuff around the world is going to get cheap for – it seems – a good while going forward.

The Baltic Dry Index which tracks worldwide international shipping prices of various dry bulk cargoes has dropped sharply over the last month. It’s a bit of a bad sign for the world economy and for rubber prices, but it also opens up opportunities.

The Baltic Dry Index for the last 3 months


Responses

  1. Does that chart show that the price of shipping generally has been cut to a third? To a layman at least that price change sounds quite worrying to the world economy.

  2. Well, yes, but the BDI is very volatile. Look back a couple of years and this move looks less dramatic.

  3. […] So, right now,  it’s off the coast of Guinea Bissau doing 17.5 knots which is slow for a container ship, but at least faster than 19th century clipper ships. […]


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